Sugar

Sugar

Brexit

The European Union (EU) is the world's biggest producer of beet sugar and the principal importer of raw cane sugar for refining. While the EU countries have a common market organisation for sugar, the EU has agreements with other countries worldwide on sugar import and export.

The EU is the world’s leading producer of beet sugar, with around 50% of the total. However, beet sugar represents only 20% of the world’s sugar production; the other 80% is produced from sugar cane.

Most of the EU's sugar beet is grown in the northern half of Europe, where the climate is more suited to growing beet. The most competitive producing areas are in northern France, Germany, the United Kingdom and Poland. The EU also has an important refining industry that processes imported raw cane sugar.

In order to support European growers and processors, the sugar sector was originally subject to production quotas and a minimum price. However, as part of the process of making European agriculture more market-orientated, the quota system ended on 30 September 2017.

EU sugar policy

Sugar is part of the common market organisation (CMO) between EU countries. Beet farmers can get income support in the form of direct payments. EU countries also have the option to grant additional support to specific sectors in difficulty – including sugar beet and sugar cane production. Eleven EU countries have decided to grant this so-called voluntary coupled support for sugar beet producers; it has not been granted for sugar cane.

The EU can support the sugar sector with specific market measures, in particular private storage aid and a collective bargaining system for growers.

Private storage aid can be granted taking into account market prices, minimum prices, costs and margins. The European Commission may grant this aid in order to to keep a certain volume of sugar out of the market, during a certain period, in case of a severe market disturbance. The CMO rules foresee additional support measures in case of severe market disturbances due to sharp increase or decrease in prices, amongst others.

In addition, the European Commission has set up a far-reaching system of collective bargaining, strengthening the position of beet growers when negotiating with other actors in the food chain. The sugar sector is the only area where such far-reaching agreements with value-sharing arrangements are allowed without competition scrutiny.

Trade with countries outside the EU

Trade policy is an exclusive power of the EU – so only the EU, and not individual member states, can legislate on trade matters and conclude international trade agreements. International trade is also governed by rules of the World Trade Organisation (WTO).